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MEI Pharma Reports First Quarter Fiscal Year 2019 Results and Operational Highlights

-- MEI on Track to Initiate ME-401 Phase 2 Accelerated Approval Study Around Year-End --

Nov 8, 2018

SAN DIEGO, Nov. 8, 2018 /PRNewswire/ -- MEI Pharma, Inc. (NASDAQ: MEIP), a late-stage pharmaceutical company focused on advancing new therapies for cancer, today reported results for its first quarter ended September 30, 2018.

"Fiscal 2019 is off to a strong start both financially and strategically, with more than $90 million in cash and investments on our balance sheet at the start of the quarter, $10 million additional cash due under the recently executed Japan licensing agreement with Kyowa Hakko Kirin, a new clinical collaboration with BeiGene, and progress in preparations to start the ME-401 Phase 2 study around year-end," said Daniel P. Gold, Ph.D., president and chief executive officer of MEI Pharma. "With the planned start of the ME-401 Phase 2 study, we will have two ongoing clinical trials with the potential to support FDA marketing approval."

Dr. Gold continued: "We are also excited by our continued progress in the other programs across our pipeline, including interim data from the Phase 2 study of pracinostat in MDS, the evaluation of our CDK9 inhibitor, voruciclib, in B-cell malignancies and data from the investigator-initiated study of ME-344 in breast cancer."

Recent Program Highlights and Upcoming Milestones

Upcoming Milestones

  • MEI will present data from three clinical stage drug development programs at the 2018 American Society of Hematology (ASH) Annual Meeting to be held December 1-4, 2018 in San Diego:
    • Updated results from the Phase 1b study evaluating ME-401 in relapsed/refractory follicular lymphoma (FL) and other indolent B-cell malignancies.
    • Data from an interim analysis of pracinostat in an ongoing Phase 2 study evaluating patients with high/very high-risk myelodysplastic syndrome (MDS).
    • Results from a preclinical study demonstrating that voruciclib and venetoclax synergistically induce apoptosis in acute myeloid leukemia (AML) cells in vitro.
  • MEI plans to initiate the Phase 2 study to support accelerated approval of ME-401 in relapsed or refractory FL around year-end of calendar 2018.
  • MEI expects to report updates regarding the ongoing voruciclib Phase 1 study at medical meetings in 2019.
  • MEI expects to report additional data from the investigator-sponsored Phase 1 study evaluating ME-344 at medical meetings in 2019.

Clinical Development Highlights

  • In October 2018, MEI announced a clinical collaboration to evaluate the safety and efficacy of MEI's ME-401, an investigational phosphatidylinositol 3-kinase (PI3K) delta inhibitor, in combination with BeiGene's zanubrutinib, an investigational Bruton's tyrosine kinase (BTK) inhibitor, for the treatment of patients with B-cell malignancies.
  • In July 2018, the Company discussed with FDA a ME-401 monotherapy accelerated approval strategy in patients with relapsed or refractory FL. Informed by the discussions with the FDA, the Company is advancing ME-401 into a Phase 2, single-agent study for the treatment of adults with relapsed or refractory FL. The Phase 2 study is intended to support accelerated approval and is planned to begin around the end of 2018. Accelerated approval of ME-401 will be subject to FDA review of the improvement provided by ME-401 over other therapies available at the time of the regulatory action.

Corporate Highlights

  • In November 2018, MEI announced the execution of a license development and commercialization agreement granting Kyowa Hakko Kirin exclusive rights to develop and commercialize ME-401 in Japan. Under the terms of the agreement, MEI will receive a $10.0 million upfront payment and is eligible to receive up to $87.5M in additional development and commercialization milestones, and royalties on sales.
  • In July 2018, the Company announced that David M. Urso, J.D., senior vice president of corporate development and general counsel, was promoted to chief operating officer. Mr. Urso is also continuing as the Company's general counsel and head of corporate development.

Financial Highlights

  • As of September 30, 2018, MEI had $90.8 million in cash, cash equivalents and short-term investments, with no outstanding debt. Additionally, a $10 million upfront payment is due under the Japan license agreement executed with Kyowa Hakko Kirin.
  • Research and development expenses were $6.1 million for the quarter ended September 30, 2018, compared to $6.1 million for the same period in 2017. Research and development expenses reflect increased costs for the development of ME-401, offset by a reduction in expenses related to voruciclib, as the prior year amounts included acquisition costs for voruciclib.
  • General and administrative expenses were $3.4 million for the quarter ended September 30, 2018, compared to $2.5 million for the same period in 2017. The increase primarily relates to professional services expenses, share-based compensation, and general corporate expenses.
  • The Company recognized revenues of $0.5 million for the quarter ended September 30, 2018, compared to $0.3 million for the same period in 2017. The increase is related to higher levels of research and development activities performed pursuant to the Helsinn license agreement.
  • Net loss for the quarter ended September 30, 2018, was $14.5 million, or $0.21 per share compared $8.8 million, or $0.24 per share for the same period in 2017. The Company had 71,115,444 shares of common stock outstanding as of September 30, 2018, compared with 36,950,177 shares as of September 30, 2017.
  • The adjusted net loss, excluding non-cash expenses related to changes in the fair value of the warrants issued in connection with the May 2018 financing (a non-GAAP measure) for the quarter ended September 30, 2018, was $9.6 million, or $0.14 per share.
  • Cash expenditures for operating activities were $12.8 million for the quarter ended September 30, 2018, compared to $6.6 million for 2017. The increase in cash used for the three months ended September 30, 2018 primarily relates to changes in working capital associated with our clinical development programs, including start-up costs related to the ME-401 Phase 2 accelerated approval study.

About MEI Pharma

MEI Pharma, Inc. (NASDAQ: MEIP) is a San Diego-based pharmaceutical company focused on leveraging its extensive development and oncology expertise to identify and advance new therapies for cancer. The Company's portfolio of drug candidates includes pracinostat, an oral HDAC inhibitor that is partnered with Helsinn Healthcare, SA. Pracinostat has been granted Breakthrough Therapy Designation from the U.S. Food and Drug Administration for use in combination with azacitidine for the treatment of patients with newly diagnosed acute myeloid leukemia (AML) who are unfit for intensive chemotherapy. Pracinostat is also being developed in combination with azacitidine for the treatment of patients with high and very high-risk myelodysplastic syndrome (MDS). MEI Pharma's clinical development pipeline also includes ME-401, a highly differentiated oral PI3K delta inhibitor currently in a Phase 1b study in patients with relapsed/refractory chronic lymphocytic leukemia (CLL) or FL, and voruciclib, an oral, selective cyclin-dependent kinase (CDK) inhibitor shown to suppress myeloid leukemia cell differentiation protein (MCL1), a known mechanism of resistance to B-cell lymphoma (BCL2) inhibitors. The Company is also developing ME-344, a novel mitochondrial inhibitor currently in an investigator-initiated study in combination with bevacizumab for the treatment of HER2-negative breast cancer. Pracinostat, ME-401, ME-344 and voruciclib are investigational agents and are not approved for use in the U.S. For more information, please visit www.meipharma.com.

Under U.S. law, a new drug cannot be marketed until it has been investigated in clinical studies and approved by the FDA as being safe and effective for the intended use. Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval, or the failure to obtain such approval, of our product candidates; uncertainties or differences in interpretation in clinical trial results; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.

MEI PHARMA, INC.

BALANCE SHEETS

(In thousands, except per share amounts)






September 30,


June 30,


2018


2018





ASSETS

Current assets:




Cash and cash equivalents

$             6,118


$   13,309

Short term investments

84,646


89,434

Total cash, cash equivalents and short-term investments

90,764


102,743

Prepaid expenses and other current assets

3,671


1,586

Total current assets

94,435


104,329

Intangible assets, net

287


296

Property and equipment, net

28


32

Total assets

$           94,750


$ 104,657









LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:




Accounts payable

$             1,555


$      3,643

Accrued liabilities

2,489


3,454

Deferred revenue

740


788

Total current liabilities

4,784


7,885

Warrant liability

50,207


46,313

Total liabilities

54,991


54,198





Commitments and contingencies 








Stockholders' equity:




Preferred stock, $0.01 par value; 100 shares authorized; none outstanding

-


-

Common stock, $0.00000002 par value; 113,000 shares authorized; 71,115 and 70,406 shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively

-


-

Additional paid-in-capital

268,700


264,858

Accumulated deficit

(228,941)


(214,399)

Total stockholders' equity

39,759


50,459

Total liabilities and stockholders' equity

$           94,750


$ 104,657

 

MEI PHARMA, INC.

STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)










Three Months Ended
September 30, 


2018


2017





Revenues:




 Research and development revenue 

$        488


$      283

Total revenues

488


283





Operating expenses:




Cost of research and development revenue

989


618

Research and development

6,131


6,064

General and administrative

3,401


2,488

Total operating expenses

10,521


9,170





Loss from operations

(10,033)


(8,887)





Other income (expense):




Change in fair value of warrant liability

(4,962)


-

Interest and dividend income

454


100

Income tax expense

(1)


(1)

Net loss

$ (14,542)


$ (8,788)





Net loss per share - basic and diluted

$     (0.21)


$   (0.24)





Shares used in computing net loss per share:




Basic

70,885


37,245

Diluted

70,885


37,245

 

MEI PHARMA, INC.

Reconciliation of GAAP Net Loss to Adjusted Net Loss

(In thousands)










Three Months Ended
September 30,


2018


2017





Net loss

$ (14,542)


$ (8,788)

Add: Change in fair value of warrant liability

4,962


-

Adjusted net loss

$   (9,580)


$ (8,788)





Net loss per share - basic and diluted

$     (0.21)


$   (0.24)





Adjusted net loss per share - basic and diluted

$     (0.14)


$   (0.24)





Shares used in computing net loss per share:




Basic and Diluted

70,885


37,245

 

MEI Pharma Logo. (PRNewsFoto/MEI Pharma, Inc.)

 

SOURCE MEI Pharma, Inc.

For further information: David A. Walsey, VP of Investor Relations and Corporate Communications, Tel: 858-369-7104, investor@meipharma.com, or Jason I. Spark, Canale Communications for MEI Pharma, Tel: 619-849-6005, jason@canalecomm.com


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